Europe risks losing 30 million jobs due to US shale

Manufacturers of petrochemicals, aluminum, fertilizers and plastics are leaving Europe to take advantage of booming US production of natural gas from shale rock formations, the IEA says.

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By PRIYANKA SHARMA and LANANH NGUYEN

Bloomberg

The US shale-gas boom is placing 30 million jobs at risk in
Europe as companies with greater reliance on energy contend
with higher fuel prices than their American counterparts, the
International Energy Agency said.

Manufacturers of petrochemicals, aluminum,
fertilizers and plastics are leaving Europe to take advantage of
booming US production of natural gas from shale rock
formations, Fatih Birol, chief economist for the
International Energy Agency, a Paris-based adviser to 29
nations, said at a conference in London.

The US has become the worlds largest producer of oil
and gas as hydraulic fracturing and horizontal drilling help
producers extract resources from shale rock. The
countrys refineries processed a record volume of crude
last week as plants took advantage of cheaper domestic
crudes.

Chemical makers from Germanys BASF to Brazils
Braskem plan to invest as much as $72 billion in US plants to
take advantage of low-cost natural gas feedstock.

West Texas Intermediate crude traded at a discount of
$5.85/bbl to European benchmark Brent at 5:43 p.m. on the ICE
Futures Europe exchange in London. US August natural gas
futures traded for $3.96/MMBtu on the New York Mercantile
Exchange, compared with $6.49/MMBtu for the equivalent UK
contract on ICE in London.

US refineries are competing for market share and benefiting
from margins that exceed those of European competitors by as much as
$10/bbl because of cheaper crude, Hermes Commodities said in
a report.

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JOHN POPIELARCZYK07.18.2014

As Mark Twain said, "...the report of my death was an exageration". Forty-five years in the energy business tell me things will change. The increasing legislation in the US limiting and banning fracking may seriouly limit the ability of global firms to take advantage of the cheap production from US gas. In turn, this will have a very detrimental impact on a struggling US economy. If the industry doesn't proactively address and resolve the issues. Uninformed hype and hysteria may pave the way to complete bans. It has happened too often to ignore. I pray we have learned from our past mistakes.

Silverback07.18.2014

This report is nothing shy of a BS poster - Yes WTI traded at a discount of $5.85 to Brent, but this discount has been much deeper in the past so why is that even news? As for 30 million jobs being at risk I also call BS - any major change in manufacturing - especially involving the use of hydrocarbons - is going to encounter significant regulatory red tape in the US. Perhaps if the politicians got out of the market this article could hold a small glimmer of truth, but 30 million? Please

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